How do you measure business growth? What metrics are the most telling of the rate at which your business is growing?
The point of tracking growth metrics is to determine whether your business is growing, and if not, how you can change that. There are many ways to measure your business’s growth over time, but it’s best to focus on the few metrics that make the most difference.
Here’s how to identify the most relevant growth metrics for your business.
Measuring Business Growth
Not all growth metrics matter equally, so focus on the few that impact your business the most. These are your core “growth levers.” Identify them by looking at your data to find what correlates best with your product’s click moment.
Consider a hypothetical software-as-a-service (SaaS) product that aggregates and recommends popular newsletters. If the core value comes from seeing those excellent recommendations, you’d want to track the one key metric—the metric that correlates most closely with the core value—as well as two or three that correlate almost as well. Say your users who consistently open their weekly recommendations email (above 50% open rate) typically stay with your service. In this case, your key metric could be the open rate for those emails, and you’d want to focus on increasing the open rate for each user.
Secondary growth levers might be how often users click through to the recommendations, and whether they share what you recommend on social media.
Common Growth Metrics
1) Revenue/income: Track this basic metric overall (how much revenue your business as a whole generates) and for each product or service you offer (so that you can determine which ones are most profitable).
2) Conversion rates: How often your sales strategies successfully convert leads (prospective customers) into paying customers. Tracking conversion rates for each sales tactic you try can help you determine which works the best.
3) Active users: Track your daily active users through each month, and compare the months to find the trend in your active users. Compare that trend to the growth hacks you try each month, and you can see which hacks contribute best to an active user base.
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